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The Craft

The ultimate resource for alcohol beverage news, trends and reports for bars, distributors and suppliers.

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There's no real secret when it comes to the savings you can have when you buy in bulk, so why aren't more beverage retailers taking advantage of bulk purchasing? It could be because they adopt a pattern of knowing what they need and sticking to their routine, but even though that might be the easier path to take, if you're not buying your alcohol order in bulk you could be missing out on huge annual savings. Let's take a look at how retailers are changing their buying behavior to cash in on bulk discounts.

 

Buying in bulk is a numbers game

And it's one that can work in your favor. Retailers can save 10% on average when making their purchases in bulk.

Whether you're in the beverage industry or not, purchasing more products at once gives you a lower price-per-unit. When planning inventories, all types of businesses across varied industries buy goods in bulk to better manage their costs and help increase that bottom line. The same is true when buying alcohol, but oftentimes these discounts go unaccounted for. The majority of orders on Provi (around 65%) are eligible for a bulk discount but only 30% of retailers are taking advantage of those discounts!

Getting discounts is all about consolidation

"We used to not order enough at a time to get discounts...but now I probably save $50k a year."
- Sports bar in Georgia and Provi customer

Distributors offer retailers discounts for buying their products in bulk like going from single bottles to cases, or opting for multiple cases at once. These discounts typically apply to the majority of products, but while retailers are generally aware of these cost-saving techniques, they don't always take advantage of it. Why?

There are a few reasons why an establishment might forego the bulk discount. Perhaps they don't have enough cash on hand, or fear they won't go through enough of the product quick enough to validate the purchase. This is where order consolidation comes in.

If retailers consolidated their purchases by ordering the same volume of product they normally do, but opted to order it at once instead of spread out over multiple orders, they'd be able to hit the savings threshold. Provi sees these savings slip through the cracks often. There are retailers that order every other week or once a month, buying a bulk order and hitting the cost-saving threshold, while there are other retailers who order weekly and, while ultimately spending the same amount over the span of a month, don't hit that same savings limit by order size.

What type of customer can qualify?

According to Provi's data, the majority of retailers (54%) order enough quantity of a product over a longer period of time to qualify for the bulk discount. Those discounts don't take long to add up, either. The average savings for retailers buying in bulk on Provi is between 5 - 20%, accounting for 75% of the discounts claimed. So at the end of the day, when all it would take is some crafty inventory management and order consolidation to see the discount savings applied and the cash build up, how can you afford to miss out?

"Didn't think I'd have the cash on hand to be able to bulk buy for discounts... but I got creative and started and now I've been able to build a pretty big nest egg."
- Liquor store in South Carolina and Provi customer

 

 

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